Career Progressions and Wage Growth: Decreasing the Gap Between Richer and Poorer Workers

In our previous article, we explored the contribution of different career dynamics to the earnings gap between poorer and richer workers. We emphasized how poorer workers do not lack opportunities to change jobs, as they have high job mobility rates. Thus, they potentially could work at increasingly better-paying firms but seldom do so in practice. Looking at previous economic literature — including a leading framework for the labor market: the job ladder model — we argued that postulating a common job ladder for both poorer and richer workers is not supported by the data. In this article, we illustrate an alternative framework and evaluate real-world policies with it.